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Ahead of the Bell: Rosetta Resources

NEW YORK (AP) -- A Citi analyst on Thursday raised his rating for Rosetta Resources Inc. to "Buy" from "Neutral" as well as his price target after the company posted a better-than-expected third-quarter profit, helped by higher production.

On Wednesday, the Houston-based energy company reported net income of $17.7 million, or 33 cents per share, down from $31.9 million, or 61 cents per share, in the same quarter last year.

Excluding one-time charges, the company said it posted adjusted earnings of 76 cents per share.

Revenue rose 21 percent to $122.8 million from $101.3 million.

Analysts, on average, expected earnings of 72 cents per share on $143.2 million in revenue, according to a FactSet poll.

Rosetta said its third-quarter production jumped 45 percent to 37,100 barrels of oil equivalent per day.

Citi analyst Joseph Stewart said that based on the company's projections, its production could increase about 30 percent in 2013, above his previous prediction of 23 percent growth.

At the same time, Rosetta's fourth-quarter cost guidance was lower than expected, suggesting lower 2013 unit costs, he said.

"Given Rosetta's top tier production growth outlook, and best in class returns, we think the valuation is conservative," Stewart wrote in a note to investors.

He boosted his price target for the company by $10 to $60 per share. Its shares

Rosetta shares rose 50 cents to $48.40 in premarket trading. They are closer to the high end of their 52-week range of $32.37 set in late June and $54.58 reached last December.